This
example
helps
compare the cost of investing in the fund with the cost of investing in other
funds.
Let's say, hypothetically, that the annual return for shares of
the fund is 5% and that the fees and the annual operating expenses for shares of
the fund are exactly as described in the fee table. This example illustrates the
effect of fees and expenses, but is not meant to suggest actual or expected fees
and expenses or returns, all of which may vary. For every $10,000 you invested,
here's how much you would pay in total expenses if you sell all of your shares
at the end of each time period indicated:
|
1
year |
$
|
60
|
|
3
years |
$
|
189
|
|
5
years |
$
|
329
|
|
10
years |
$
|
738
|
Portfolio
Turnover
The
fund pays transaction costs, such as commissions, when it buys and sells
securities (or "turns over" its portfolio). A higher portfolio turnover rate may
indicate higher transaction costs and may result in higher taxes when fund
shares are held in a taxable account. These costs, which are not reflected in
annual operating expenses or in the example, affect the fund's performance.
During the most recent fiscal year, the fund's portfolio turnover rate
was 21 %
of the average value of its portfolio.
Principal
Investment Strategies
- Normally
investing at least 80% of assets in preferred securities and other
income-producing securities.
- Normally
investing in all types of preferred securities and other income-producing
securities such as contingent convertible securities and corporate hybrid
securities.
- Normally
investing primarily in securities rated at least BB by Standard & Poor's
(S&P), Ba by Moody's Investors Service (Moody's), comparably rated by at
least one nationally recognized credit rating agency, or, if unrated,
considered by Fidelity Management & Research Company LLC (FMR) to be of
comparable quality. Securities rated below BBB by S&P and below Baa3 by
Moody's are less than investment-grade quality (also referred to as high yield
debt securities or junk bonds).
- Investing
in securities of domestic and foreign issuers.
- Using
fundamental analysis of each issuer's financial condition and industry
position and market and economic conditions to select investments.
- Concentrating
investments in securities of issuers principally engaged in the business
activities of the industries in the financial services sector.
Principal
Investment Risks
Because
preferred securities have a lower priority claim on assets or earnings than
senior debt instruments in an issuer's capital structure, they are subject to
greater credit and liquidation risk than more senior debt instruments. In
addition, preferred securities are subject to other risks, such as limited or no
voting rights, deferring or skipping distributions, floating interest rates or
distributions, interest rate risk, and the issuer having the right to redeem the
security prior to any stated maturity date.
Stock
markets and, as a result, stock market indexes, are volatile and can decline
significantly in response to adverse issuer, political, regulatory, market, or
economic developments. Different parts of the market, including different market
sectors, and different types of securities can react differently to these
developments.
Interest
rate increases can cause the price of a debt security to decrease.
Foreign
markets can be more volatile than the U.S. market due to increased risks of
adverse issuer, political, regulatory, market, or economic developments and can
perform differently from the U.S. market.
- Financials
Industry Concentration.
The
financials industries are subject to extensive government regulation, can be
subject to relatively rapid change due to increasingly blurred distinctions
between service segments, and can be significantly affected by availability and
cost of capital funds, changes in interest rates, the rate of corporate and
consumer debt defaults, and price competition.
The
value of an individual security or particular type of security can be more
volatile than, and can perform differently from, the market as a whole.
Lower-quality
debt securities (those of less than investment-grade quality, also referred to
as high yield debt securities or junk bonds) and certain types of other
securities involve greater risk of default or price changes due to changes in
the credit quality of the issuer.
The
value of lower-quality debt securities and certain types of other securities can
be more volatile due to increased sensitivity to adverse issuer, political,
regulatory, market, or economic developments.
- Fluctuation
of Net Asset Value and Share Price.
The
net asset value per share (NAV) of the fund will generally fluctuate with
changes in the market value of the fund's holdings. The fund's shares can be
bought and sold in the secondary market at market prices. Disruptions to
creations and redemptions, the existence of extreme market volatility or
potential lack of an active trading market for the fund's shares may result in
the fund's shares trading significantly above (at a premium) or below (at a
discount) to NAV.
Given
the nature of the relevant markets for certain of the fund's securities, shares
may trade at a larger premium or discount to the NAV than shares of other
ETFs.
In
addition, in stressed market conditions or periods of market disruption or
volatility, the market for shares may become less liquid in response to
deteriorating liquidity in the markets for the fund's underlying portfolio
holdings.
- Contingent
Convertible Securities Risk.
Contingent
convertible securities have unique equity conversion or principal write-down
features that involve additional risks, which may include cancellation of
interest payments by the issuer or a regulatory authority; subordination to
other creditors due to either a liquidation or other bankruptcy-related event or
a conversion of the security from debt to equity; and a write-down of the
security's principal amount.
There
can be no assurance that an active trading market will be maintained. Market
makers and Authorized Participants are not obligated to make a market in the
fund's shares or to submit purchase and redemption orders for creation units. In
addition, trading may be halted, for example, due to market conditions.
Unlike
certain ETFs, the fund may effect some or all creations and redemptions using
cash, rather than in-kind securities. As a result, an investment in the fund may
be less tax-efficient than an investment in an ETF that distributes portfolio
securities entirely in-kind.
In
addition, the fund is classified as non-diversified under the Investment Company
Act of 1940 (1940 Act), which means that it has the ability to invest a greater
portion of assets in securities of a smaller number of individual issuers than a
diversified fund. As a result, changes in the market value of a single
investment could cause greater fluctuations in share price than would occur in a
more diversified fund.
An
investment in the fund is not a deposit of a bank and is not insured or
guaranteed by the Federal Deposit Insurance Corporation or any other government
agency .
You
could lose money by investing in the fund.
Performance
Performance
history will be available for the fund after the fund has been in operation for
one calendar year.
Investment
Adviser
FMR
(the Adviser) is the fund's manager. Other investment advisers serve as
sub-advisers for the fund.
Portfolio
Manager(s)
Brian
Chang (Co-Portfolio Manager) has managed the fund since 2021.
Adam
Kramer (Co-Portfolio Manager) has managed the fund since 2021.
Purchase
and Sale of Shares
Shares
of the fund are listed and traded on an exchange, and individual fund shares may
only be bought and sold in the secondary market through a broker or dealer at
market price. These transactions, which do not involve the fund, are made at
market prices that may vary throughout the day, rather than at NAV. Shares of
the fund may trade at a price greater than the fund's NAV (premium) or less than
the fund's NAV (discount). An investor may incur costs attributable to the
difference between the highest price a buyer is willing to pay to purchase
shares (bid) and the lowest price a seller is willing to accept for shares (ask)
when buying or selling fund shares in the secondary market (the "bid-ask
spread"). Recent information, including information regarding the fund's NAV,
market price, premiums and discounts, and bid-ask spread, is available at
www.fidelity.com.
Tax
Information
Distributions
you receive from the fund are subject to federal income tax and generally will
be taxed as ordinary income or capital gains, and may also be subject to state
or local taxes, unless you are investing through a tax-advantaged retirement
account (in which case you may be taxed later, upon withdrawal of your
investment from such account).
Payments
to Broker-Dealers and Other Financial Intermediaries
The
fund, the Adviser, Fidelity Distributors Company LLC (FDC), and/or their
affiliates may pay intermediaries, which may include banks, broker-dealers,
retirement plan sponsors, administrators, or service-providers (who may be
affiliated with the Adviser or FDC), for the sale of fund shares and related
services. These payments may create a conflict of interest by influencing your
intermediary and your investment professional to recommend the fund over another
investment. Ask your investment professional or visit your intermediary's web
site for more information.
Fund
Basics
Investment
Objective
Fidelity®
High Yield Factor ETF seeks a high level of income. The fund may also seek
capital appreciation.
Principal
Investment Strategies
The
Adviser normally invests at least 80% of the fund's assets in debt securities
rated below investment grade (also referred to as high yield debt securities or
junk bonds). The Adviser may invest in companies whose financial condition is
troubled or uncertain and that may be involved in bankruptcy proceedings,
reorganizations, or financial restructurings.
The
Adviser uses the ICE ®
BofA
®
BB-B
US High Yield Constrained Index
as
a guide in structuring the fund and selecting its investments as it relates to
credit quality distribution and risk characteristics. The Adviser may also
invest in securities that have lower or higher credit quality ratings than
securities in the index.
The
Adviser normally invests the fund's assets primarily in securities rated BB or B
by S&P, Ba or B by Moody's, comparably rated by at least one nationally
recognized credit rating agency, or, if unrated, considered by the Adviser to be
of comparable quality. These securities can be considered less than
investment-grade, and are also referred to as high yield debt securities or junk
bonds. The Adviser may also invest in securities that have lower or higher
credit quality ratings.
The
Adviser may invest the fund's assets in securities of foreign issuers in
addition to securities of domestic issuers.
In
buying and selling securities for the fund, the Adviser uses a proprietary
multifactor quantitative model to systematically screen over 1,000 bonds and
select those with strong return potential and low probability of default using a
value and quality factor-based methodology. In addition, the Adviser will employ
active security selection to optimize trading and reduce transaction
costs.
If
the Adviser's strategies do not work as intended, the fund may not achieve its
objective.
Investment
Objective
Fidelity®
Preferred Securities & Income ETF seeks high total return through a
combination of current income and capital appreciation.
Principal
Investment Strategies
The
Adviser normally invests at least 80% of the fund's assets in preferred
securities and other income-producing securities. The Adviser may invest in all
types of preferred securities and in other income-producing securities such as
contingent convertible securities and corporate hybrid securities.
Preferred
securities include preferred stock, hybrid or trust preferred securities, fixed
and floating rate preferred securities, listed and unlisted preferred
securities, and preferred securities of all par values.
The
Adviser normally invests the fund's assets primarily in securities that are
rated at least BB by S&P, Ba by Moody's, comparably rated by at least one
nationally recognized credit rating agency, or, if unrated, considered by the
Adviser to be of comparable quality. Securities rated below BBB by S&P and
below Baa3 by Moody's are less than investment-grade quality (also referred to
as high yield debt securities or junk bonds).
The
Adviser may invest the fund's assets in securities of foreign issuers in
addition to securities of domestic issuers.
The
fund will concentrate its investments in securities of issuers principally
engaged in the business activities of the industries in the financial services
sector. The fund may invest a significant percentage of its assets in relatively
few companies and may invest up to 25% in a single company. The fund is
classified as non-diversified.
In
buying and selling securities for the fund, the Adviser relies on fundamental
analysis of each issuer and its potential for success in light of its current
financial condition, its industry position, and economic and market conditions.
Factors considered include a security's structural features and current price
compared to its long-term value, and the earnings potential, credit standing,
and management of the security's issuer.
Description
of Principal Security Types
Debt
securities are
used by issuers to borrow money. The issuer usually pays a fixed, variable, or
floating rate of interest, and must repay the amount borrowed, usually at the
maturity of the security. Some debt securities, such as zero coupon bonds,
do not pay current interest but are sold at a discount from their face
values. Debt securities include corporate bonds, government securities
(including Treasury securities), repurchase agreements, money market securities,
mortgage and other asset-backed securities, loans and loan participations, and
other securities believed to have debt-like characteristics, including hybrids
and synthetic securities.
Preferred
securities include
preferred stock, hybrid or trust preferred securities, fixed and floating rate
preferred securities, listed and unlisted preferred securities, and preferred
securities of all par values. Preferred securities generally are junior to all
forms of an issuer's senior debt, but may have "preference" over common stock in
the payment of distributions and in the event an issuer is liquidated or
declares bankruptcy.
Corporate
hybrid securities have
features of both equity and debt securities and they may constitute senior debt,
junior debt, or equity in an issuer's capital structure.
Contingent
convertible securities
are
securities typically issued by banking institutions that, under certain
circumstances, may convert into common stock of the issuer or have their
principal written down upon the occurrence of certain "triggers." The triggers
are generally linked to regulatory capital thresholds and regulatory actions
calling into question the issuing banking institution's continued viability as a
going-concern. Certain contingent convertible securities may be debt securities,
as determined by the Adviser, depending on, among other criteria, the security's
position in the insolvency waterfall, regulatory capital classification,
maturity date, and interest payment structure.
Equity
securities represent
an ownership interest, or the right to acquire an ownership interest, in an
issuer. Different types of equity securities provide different voting and
dividend rights and priority in the event of the bankruptcy of the issuer.
Equity securities include common stocks, preferred stocks, convertible
securities, and hybrid equity securities.
Principal
Investment Risks
Many
factors affect each fund's performance. Developments that disrupt global
economies and financial markets, such as pandemics and epidemics, may magnify
factors that affect a fund's performance. Fidelity ®
High
Yield Factor ETF's share price and yield change daily based on changes in market
conditions and interest rates and in response to other economic, political, or
financial developments. A fund's reaction to these developments will be affected
by the types and maturities of securities in which the fund invests, the
financial condition, industry and economic sector, and geographic location of an
issuer, and the fund's level of investment in the securities of that issuer.
Because Fidelity ®
Preferred
Securities & Income ETF concentrates its investments in securities of
issuers principally engaged in the business activities of the industries in the
financial services sector, the fund's performance could depend heavily on the
performance of those industries and could be more volatile than the performance
of less concentrated funds. In addition, because the fund may invest a
significant percentage of assets in a single issuer, the fund's performance
could be closely tied to that one issuer and could be more volatile than the
performance of more diversified funds. When you sell your shares they may be
worth more or less than what you paid for them, which means that you could lose
money by investing in a fund.
T
he
following factors can significantly affect a fund's performance:
Preferred
Securities Risk. Because
preferred securities have a lower priority claim on assets or earnings than
senior debt instruments in an issuer's capital structure, they are subject to
greater credit and liquidation risk than more senior debt instruments. In
addition, preferred securities are subject to other risks, such as limited or no
voting rights, deferring or skipping distributions, floating interest rates or
distributions, interest rate risk, and the issuer having the right to redeem the
security prior to any stated maturity date. Because the distribution or interest
rates may be floating, or convert from fixed to floating at a specified future
time, the market value of preferred securities may fall in a declining interest
rate environment and may also fall in a rising interest rate environment if
there is a lag between the rise in interest rates and the reset. A secondary
risk associated with declining interest rates is the risk that income earned by
the fund on floating rate securities may decline due to lower coupon payments on
the floating rate securities. Preferred securities may be substantially less
liquid than other securities, which involves the risk that the securities will
not be able to be sold at the time desired by the fund or at prices
approximating the values at which the fund is carrying the securities on its
books.
Contingent
Convertible Securities Risk. Contingent
convertible securities have unique equity conversion or principal write-down
features that are tailored to the issuing banking institution and its regulatory
requirements. Contingent convertibles may have fully discretionary coupons. This
means coupons can potentially be cancelled at the banking institution's
discretion or at the request of the relevant regulatory authority in order to
help the bank absorb losses. Contingent convertibles will, in the majority of
circumstances, be issued in the form of subordinated debt instruments in order
to provide the appropriate regulatory capital treatment prior to a conversion.
In the event of liquidation, dissolution or winding-up of an issuer prior to a
conversion, the rights and claims of the holders of the contingent convertibles
against the issuer will generally rank junior to the claims of all holders of
unsubordinated obligations of the issuer. In addition, if the contingent
convertibles are converted into the issuer's underlying equity securities
following a conversion event, each holder will be subordinated due to their
conversion from being the holder of a debt instrument to being the holder of an
equity instrument.
Interest
Rate Changes. Debt
securities, including money market securities, have varying levels of
sensitivity to changes in interest rates. In general, the price of a debt
security can fall when interest rates rise and can rise when interest rates
fall. Securities with longer maturities and certain types of securities, such as
mortgage securities and the securities of issuers in the financial services
sector, can be more sensitive to interest rate changes, meaning the longer the
maturity of a security, the greater the impact a change in interest rates could
have on the security's price. Short-term and long-term interest rates do not
necessarily move in the same amount or the same direction. Short-term securities
tend to react to changes in short-term interest rates, and long-term securities
tend to react to changes in long-term interest rates. Securities with floating
interest rates can be less sensitive to interest rate changes, but may decline
in value if their interest rates do not rise as much as interest rates in
general. Securities whose payment at maturity is based on the movement of all or
part of an index and inflation-protected debt securities may react differently
from other types of debt securities. In market environments where interest rates
are rising, issuers may be less willing or able to make principal and/or
interest payments on securities when due. The discontinuation and replacement of
London Interbank Offered Rate (LIBOR) (an indicative measure of the average
interest rate at which major global banks could borrow from one another) and
other benchmark rates may have a significant impact on the financial markets and
may adversely impact a fund's performance.
Stock
Market Volatility .
The value of equity securities fluctuates in response to issuer, political,
market, and economic developments. Fluctuations, especially in foreign markets,
can be dramatic over the short as well as long term, and different parts of the
market, including different market sectors, and different types of equity
securities can react differently to these developments. For example, stocks of
companies in one sector can react differently from those in another, large cap
stocks can react differently from small cap stocks, and "growth" stocks can
react differently from "value" stocks. Issuer, political, or economic
developments can affect a single issuer, issuers within an industry or economic
sector or geographic region, or the market as a whole. Changes in the financial
condition of a single issuer can impact the market as a whole. Terrorism and
related geo-political risks have led, and may in the future lead, to increased
short-term market volatility and may have adverse long-term effects on world
economies and markets generally.
Foreign
Exposure. Foreign
securities, foreign currencies, and securities issued by U.S. entities with
substantial foreign operations can involve additional risks relating to
political, economic, or regulatory conditions in foreign countries. These risks
include fluctuations in foreign exchange rates; withholding or other taxes;
trading, settlement, custodial, and other operational risks; and the less
stringent investor protection and disclosure standards of some foreign markets.
All of these factors can make foreign investments, especially those in emerging
markets, more volatile and potentially less liquid than U.S. investments. In
addition, foreign markets can perform differently from the U.S. market.
Global
economies and financial markets are becoming increasingly interconnected, which
increases the possibilities that conditions in one country or region might
adversely impact issuers or providers in, or foreign exchange rates with, a
different country or region.
Issuer-Specific
Changes. Changes
in the financial condition of an issuer or counterparty, changes in specific
economic or political conditions that affect a particular type of security or
issuer, and changes in general economic or political conditions can increase the
risk of default by an issuer or counterparty, which can affect a security's or
instrument's credit quality or value. The value of securities of smaller, less
well-known issuers can be more volatile than that of larger issuers.
Lower-quality debt securities (those of less than investment-grade quality, also
referred to as high yield debt securities or junk bonds) and certain types of
other securities tend to be particularly sensitive to these changes.
Lower-quality
debt securities and certain types of other securities involve greater risk of
default or price changes due to changes in the credit quality of the issuer. The
value of lower-quality debt securities and certain types of other securities
often fluctuates in response to company, political, or economic developments and
can decline significantly over short as well as long periods of time or during
periods of general or regional economic difficulty. Lower-quality debt
securities can be thinly traded or have restrictions on resale, making them
difficult to sell at an acceptable price, and often are considered to be
speculative. The default rate for lower-quality debt securities is likely to be
higher during economic recessions or periods of high interest rates.
Fluctuation
of Net Asset Value and Share Price. The
NAV of each fund's shares will generally fluctuate with changes in the market
value of each fund's holdings. Each fund's shares are listed on an exchange and
can be bought and sold in the secondary market at market prices. The market
prices of shares will fluctuate in accordance with changes in NAV and supply and
demand on the listing exchange. Although a share's market price is expected to
approximate its NAV, it is possible that the market price and NAV will vary
significantly. As a result, you may sustain losses if you pay more than the
shares' NAV when you purchase shares, or receive less than the shares' NAV when
you sell shares, in the secondary market. During periods of disruptions to
creations and redemptions, the existence of extreme market volatility, or lack
of an active trading market for a fund's shares, the market price of fund shares
is more likely to differ significantly from the fund's NAV. During such periods,
you may be unable to sell your shares or may incur significant losses if you
sell your shares. There are various methods by which investors can purchase and
sell shares and various orders that may be placed. Investors should consult
their financial intermediary before purchasing or selling shares of a fund.
Disruptions at market makers, Authorized Participants or market participants may
also result in significant differences between the market price of a fund's
shares and the fund's NAV. In addition, in stressed market conditions or periods
of market disruption or volatility, the market for shares may become less liquid
in response to deteriorating liquidity in the markets for the fund's underlying
portfolio holdings.
The
market price of shares during the trading day, like the price of any
exchange-traded security, includes a bid-ask spread charged by the exchange
specialist, market makers, or other participants that trade the particular
security. In times of severe market disruption or volatility, the bid-ask spread
can increase significantly. At those times, shares are most likely to be traded
at a discount to NAV, and the discount is likely to be greatest when the price
of shares is falling fastest, which may be the time that you most want to sell
your shares. Securities held by a fund may be traded in markets that close at a
different time than the listing exchange. During the time when the listing
exchange is open but after the applicable market closing, fixing or settlement
times, bid-ask spreads and the resulting premium or discount to the fund's NAV
may widen. The Adviser expects that, under normal market conditions, large
discounts or premiums to NAV will not be sustained in the long term because of
arbitrage opportunities.
Trading
Issues .
Although shares are listed on an exchange, there can be no assurance that an
active trading market or requirements to remain listed will be met or
maintained. Only an Authorized Participant may engage in creation or redemption
transactions directly with a fund. A fund has a limited number of intermediaries
that act as Authorized Participants. There are no obligations of market makers
to make a market in a fund's shares or of Authorized Participants to submit
purchase or redemption orders for Creation Units. Decisions by market makers or
Authorized Participants to reduce their role with respect to market making or
creation and redemption activities during times of market stress, or a decline
in the number of Authorized Participants due to decisions to exit the business,
bankruptcy, or other factors, could inhibit the effectiveness of the arbitrage
process in maintaining the relationship between the underlying value of a fund's
portfolio securities and the market price of fund shares. To the extent no other
Authorized Participants are able to step forward to create or redeem, shares may
trade at a discount to NAV and possibly face delisting. In addition, trading of
shares in the secondary market may be halted, for example, due to activation of
marketwide "circuit breakers." If trading halts or an unanticipated early
closing of the listing exchange occurs, a shareholder may be unable to purchase
or sell shares of a fund. FDC, the distributor of each fund's shares, does not
maintain a secondary market in the shares.
If
a fund's shares are delisted from the listing exchange, the Adviser may seek to
list the fund shares on another market, merge the fund with another
exchange-traded fund or traditional mutual fund, or redeem the fund shares at
NAV.
Shares
of a fund, similar to shares of other issuers listed on a stock exchange, may be
sold short and are therefore subject to the risk of increased volatility and
price decreases associated with being sold short.
Cash
Transactions Risk. Unlike
certain ETFs, each fund may effect some or all creations and redemptions using
cash, rather than in-kind securities. Therefore, it may be required to sell
portfolio securities and recognize gains on such sales that the fund might not
have recognized if it were to distribute portfolio securities in-kind. As a
result, an investment in the fund may be less tax-efficient than an investment
in an ETF that distributes portfolio securities entirely in-kind. The use of
cash creations and redemptions may also cause the fund's shares to trade in the
market at greater bid-ask spreads or greater premiums or discounts to the fund's
NAV. Furthermore, cash creation and redemption transactions may result in
certain brokerage, tax, foreign exchange, execution, price movement and other
costs and expenses related to the execution of trades resulting from such
transactions. To the extent that the maximum additional charge for creation or
redemption transactions is insufficient to cover these costs and expenses, the
fund's performance could be negatively impacted.
Quantitative
Investing. The
value of securities selected using quantitative analysis can react differently
to issuer, political, market, and economic developments than the market as a
whole or securities selected using only fundamental analysis. The factors used
in quantitative analysis and the weight placed on those factors may not be
predictive of a security's value. In addition, factors that affect a security's
value can change over time and these changes may not be reflected in the
quantitative model.
Financials
Industry Concentration. The
financials industries are subject to extensive government regulation which can
limit both the amounts and types of loans and other financial commitments they
can make, and the interest rates and fees they can charge. Profitability can be
largely dependent on the availability and cost of capital and the rate of
corporate and consumer debt defaults, and can fluctuate significantly when
interest rates change. Financial difficulties of borrowers can negatively affect
the financial services industries. Insurance companies can be subject to severe
price competition. The financial services industries can be subject to
relatively rapid change as distinctions between financial service segments
become increasingly blurred.
In
response to market, economic, political, or other conditions, a fund may
temporarily use a different investment strategy for defensive purposes. If the
fund does so, different factors could affect its performance and the fund may
not achieve its investment objective.
Other
Investment Strategies
In
addition to the principal investment strategies discussed above, the Adviser may
use various techniques, such as buying and selling futures contracts and
exchange traded funds, to increase or decrease a fund's exposure to changing
security prices, interest rates, or other factors that affect security
values.
Shareholder
Notice
The
following is subject to change only upon 60 days' prior notice to
shareholders:
Fidelity
®
High
Yield Factor ETF normally
invests at least 80% of its assets in debt securities rated below investment
grade.
Fidelity
®
Preferred
Securities & Income ETF normally
invests at least 80% of its assets in preferred securities and other
income-producing securities.
Each
fund is open for business each day that either the listing exchange or the New
York Stock Exchange (NYSE) is open.
The
NAV is the value of a single share. Fidelity normally calculates NAV as of the
close of regular trading hours on the listing exchange or the NYSE, normally
4:00 p.m. Eastern time. Each fund's assets normally are valued as of this time
for the purpose of computing NAV. The prices at which creations and redemptions
occur are based on the next calculation of NAV after a creation or redemption
order is received in an acceptable form under the authorized participant
agreement.
NAV
is not calculated and a fund will not process purchase and redemption requests
submitted on days when the fund is not open for business. The time at which
shares are priced and until which purchase and redemption orders are accepted
may be changed as permitted by the Securities and Exchange Commission
(SEC).
Shares
of each fund may be purchased through a broker in the secondary market by
individual investors at market prices which may vary throughout the day and may
differ from NAV.
To
the extent that a fund's assets are traded in other markets on days when the
fund is not open for business, the value of the fund's assets may be affected on
those days. In addition, trading in some of a fund's assets may not occur on
days when the fund is open for business.
Shares
of open-end funds in which each fund may invest (referred to as underlying
funds) are valued at their respective NAVs. NAV is calculated using the values
of any underlying funds in which it invests. Other assets are valued primarily
on the basis of market quotations, official closing prices, or information
furnished by a pricing service. Certain short-term securities are valued on the
basis of amortized cost. If market quotations, official closing prices, or
information furnished by a pricing service are not readily available or, in the
Adviser's opinion, are deemed unreliable for a security, then that security will
be fair valued in good faith by the Adviser in accordance with applicable fair
value pricing policies. For example, if, in the Adviser's opinion, a security's
value has been materially affected by events occurring before a fund's pricing
time but after the close of the exchange or market on which the security is
principally traded, then that security will be fair valued in good faith by the
Adviser in accordance with applicable fair value pricing policies. Fair value
pricing will be used for high yield debt securities when available pricing
information is determined to be stale or for other reasons not to accurately
reflect fair value.
Fair
value pricing is based on subjective judgments and it is possible that the fair
value of a security may differ materially from the value that would be realized
if the security were sold.
Shareholder
Information
Additional
Information about the Purchase and Sale of Shares
As
used in this prospectus, the term "shares" generally refers to the shares
offered through this prospectus.
General
Information
Information
on Fidelity
Fidelity
Investments was established in 1946 to manage one of America's first mutual
funds. Today, Fidelity is one of the world's largest providers of financial
services.
In
addition to its fund business, the company operates one of America's leading
brokerage firms, Fidelity Brokerage Services LLC. Fidelity is also a leader in
providing tax-advantaged retirement plans for individuals investing on their own
or through their employer.
The
Depository Trust Company (DTC) is a limited trust company and securities
depository that facilitates the clearance and settlement of trades for its
participating banks and broker-dealers. DTC has executed an agreement with FDC,
each fund's distributor.
Buying
and Selling Shares in the Secondary Market
Shares
of each fund are listed and traded on an exchange, and individual fund shares
may only be bought and sold in the secondary market through a broker. Each fund
does not impose any minimum investment for shares of a fund purchased on an
exchange. These transactions are made at market prices that may vary throughout
the day and may be greater than a fund's NAV (premium) or less than a
fund's NAV (discount). As a result, you may pay more than NAV when you purchase
shares, and receive less than NAV when you sell shares, in the secondary market.
If you buy or sell shares in the secondary market, you will generally incur
customary brokerage commissions and charges. Due to such commissions and
charges, frequent trading may detract significantly from investment
returns.
Each
fund is designed to offer investors an equity investment that can be bought and
sold frequently in the secondary market without impact on a fund, and such
trading activity is critical to ensuring that the market price of fund shares
remains at or close to NAV. Accordingly, the Board of Trustees has not adopted
policies and procedures designed to discourage excessive or short-term trading
by these investors.
Shares
can be purchased and redeemed directly from each fund at NAV only by Authorized
Participants in large increments called "Creation Units." Each fund
accommodates frequent purchases and redemptions of Creation Units by Authorized
Participants and does not place a limit on purchases or redemptions of Creation
Units by these investors. Each fund reserves the right, but does not have the
obligation, to reject any purchase or redemption transaction at any time. In
addition, each fund reserves the right to impose restrictions on disruptive,
excessive, or short-term trading.
Precautionary
Notes
- Note
to Investment Companies. For
purposes of the 1940 Act, shares are issued by a fund, and the acquisition of
shares by investment companies is subject to the restrictions of Section
12(d)(1) of the 1940 Act. Registered investment companies are permitted to
invest in a fund beyond the limits set forth in Section 12(d)(1), subject to
certain terms and conditions, including that such investment companies enter
into an agreement with the fund.
- Note
to Authorized Participants Regarding Continuous Offering. Certain
legal risks may exist that are unique to Authorized Participants purchasing
Creation Units directly from a fund. Because new Creation Units may be issued
on an ongoing basis, at any point a "distribution," as such term is used in
the Securities Act of 1933 (the Securities Act), could be occurring. As a
broker-dealer, certain activities that you perform may, depending on the
circumstances, result in your being deemed a participant in a distribution, in
a manner which could render you a statutory underwriter and subject you to the
prospectus delivery and liability provisions of the Securities Act.
For
example, you may be deemed a statutory underwriter if you purchase Creation
Units from a fund, break them down into individual fund shares, and sell such
shares directly to customers, or if you choose to couple the creation of a
supply of new fund shares with an active selling effort involving solicitation
of secondary market demand for fund shares. A determination of whether a person
is an underwriter for purposes of the Securities Act depends upon all of the
facts and circumstances pertaining to that person's activities, and the examples
mentioned here should not be considered a complete description of all the
activities that could lead to a categorization as an underwriter.
Dealers
who are not "underwriters" but are participating in a distribution (as opposed
to engaging in ordinary secondary market transactions), and thus dealing with
shares as part of an "unsold allotment" within the meaning of Section 4(a)(3)(C)
of the Securities Act, will be unable to take advantage of the prospectus
delivery exemption provided by Section 4(a)(3) of the Securities Act.
This
is because the prospectus delivery exemption in Section 4(a)(3) of the
Securities Act is not available in respect of such transactions as a result of
Section 24(d) of the 1940 Act. As a result, you should note that dealers who are
not underwriters but are participating in a distribution (as opposed to engaging
in ordinary secondary market transactions) and thus dealing with the shares that
are part of an overallotment within the meaning of Section 4(a)(3)(A) of the
Securities Act would be unable to take advantage of the prospectus delivery
exemption provided by Section 4(a)(3) of the Securities Act. Firms that incur a
prospectus-delivery obligation with respect to shares of a fund are reminded
that, under Rule 153 under the Securities Act, a prospectus delivery obligation
under Section 5(b)(2) of the Securities Act owed to an exchange member in
connection with a sale on an exchange is satisfied by the fact that the
prospectus is available at the exchange upon request. The prospectus delivery
mechanism provided in Rule 153 is only available with respect to transactions on
an exchange. Certain affiliates of each fund may purchase and resell fund shares
pursuant to this prospectus.
- Note
to Secondary Market Investors.
DTC, or its nominee, is the registered owner of all outstanding shares of a
fund. The Adviser will not have any record of your ownership. Your ownership
of shares will be shown on the records of DTC and the DTC participant broker
through which you hold the shares. Your broker will provide you with account
statements, confirmations of your purchases and sales, and tax information.
Your broker will also be responsible for distributing income and capital gain
distributions and for sending you shareholder reports and other information as
may be required.
Costs
Associated with Creations and Redemptions
The
funds may impose a creation transaction fee and a redemption transaction fee to
offset transfer and other transaction costs associated with the issuance and
redemption of Creation Units of shares. Information about the procedures
regarding creation and redemption of Creation Units and the applicable
transaction fees is included in the Statement of Additional Information
(SAI).
Dividends
and Capital Gain Distributions
Each
fund earns interest, dividends, and other income from its investments, and
distributes this income (less expenses) to shareholders as dividends. Each fund
also realizes capital gains from its investments, and distributes these gains
(less any losses) as capital gain distributions. If you purchased your shares in
the secondary market, your broker is responsible for distributing the income and
capital gain distributions to you.
Each
fund normally declares dividends and pays capital gain distributions per the
tables below:
|
Fund
Name |
Dividends
Paid |
|
Fidelity®
High Yield Factor ETF |
January,
February, March, April, May, June, July, August, September, October,
November, December |
|
Fidelity®
Preferred Securities & Income ETF |
January,
February, March, April, May, June, July, August, September, October,
November, December |
|
Fund
Name |
Capital
Gains Paid |
|
Fidelity®
High Yield Factor ETF |
December
|
|
Fidelity®
Preferred Securities & Income ETF |
December
|
As
with any investment, your investment in a fund could have tax consequences for
you (for non-retirement accounts).
Taxes
on Distributions
Distributions
investors receive are subject to federal income tax, and may also be subject to
state or local taxes.
For
federal tax purposes, certain distributions, including dividends and
distributions of short-term capital gains, are taxable to investors as ordinary
income, while certain distributions, including distributions of long-term
capital gains, are taxable to investors generally as capital gains. A percentage
of certain distributions of dividends may qualify for taxation at long-term
capital gains rates (provided certain holding period requirements are met).
Because Fidelity ®
High
Yield Factor ETF's income is primarily derived from interest, dividends from the
fund generally will not qualify for the long-term capital gains tax rates
available to individuals.
Each
fund may effect creations and redemptions using cash rather than in-kind
securities and may recognize more capital gains and be less tax-efficient than
if in-kind securities were used. When a fund effects its redemptions with
cash rather than with in-kind securities, the fund may be required to sell
portfolio securities in order to obtain the cash needed to distribute redemption
proceeds, which involves transaction costs and may cause the fund to recognize
gains that might not have been otherwise recognized or to recognize such gains
sooner than otherwise. Losses from sales of immediately reacquired securities
are subject to deferral, potentially indefinitely. Each fund generally intends
to distribute net annual gains, if any, to shareholders to comply with
applicable tax rules, causing shareholders to be subject to tax on gains they
would not otherwise be subject to or at an earlier date then if the fund
effected redemptions in-kind.
If
investors buy shares when a fund has realized but not yet distributed income or
capital gains, they will be "buying a dividend" by paying the full price for the
shares and then receiving a portion of the price back in the form of a taxable
distribution.
Any
taxable distributions investors receive will normally be taxable to them when
they receive them.
Taxes
on Transactions
Purchases
and sales of shares, as well as purchases and redemptions of Creation Units, may
result in a capital gain or loss for federal tax purposes.
Fund
Services
Adviser
FMR.
The
Adviser is each fund's manager. The address of the Adviser is 245 Summer Street,
Boston, Massachusetts 02210.
As
of December 31, 2021, the Adviser had approximately $3.6 trillion in
discretionary assets under management, and approximately $4.5 trillion when
combined with all of its affiliates' assets under management.
As
the manager, the Adviser has overall responsibility for directing each fund's
investments and handling its business affairs.
Sub-Adviser(s)
FMR
Investment Management (UK) Limited (FMR UK) ,
at 1 St. Martin's Le Grand, London, EC1A 4AS, United Kingdom, serves as a
sub-adviser for each fund. As of December 31, 2021, FMR UK had approximately
$30.9 billion in discretionary assets under management. FMR UK is an affiliate
of the Adviser.
FMR
UK may provide investment research and advice on issuers based outside the
United States and may also provide investment advisory services for Fidelity®
High Yield Factor ETF and Fidelity® Preferred Securities & Income
ETF.
Fidelity
Management & Research (Hong Kong) Limited (FMR H.K.) ,
at Floor 19, 41 Connaught Road Central, Hong Kong, serves as a sub-adviser for
each fund. As of December 31, 2021, FMR H.K. had approximately $19.0 billion in
discretionary assets under management. FMR H.K. is an affiliate of the
Adviser.
FMR
H.K. may provide investment research and advice on issuers based outside the
United States and may also provide investment advisory services for Fidelity®
High Yield Factor ETF and Fidelity® Preferred Securities & Income
ETF.
Fidelity
Management & Research (Japan) Limited (FMR Japan) ,
at Kamiyacho Prime Place, 1-17, Toranomon-4-Chome, Minato-ku, Tokyo, Japan,
serves as a sub-adviser for each fund. As of March 31, 2022, FMR Japan had
approximately $6.9 billion in discretionary assets under management. FMR Japan
is an affiliate of the Adviser.
FMR
Japan may provide investment research and advice on issuers based outside the
United States and may also provide investment advisory services for Fidelity®
High Yield Factor ETF and Fidelity® Preferred Securities & Income
ETF.
Portfolio
Manager(s)
Michael
Cheng is Lead Portfolio Manager of Fidelity ®
High
Yield Factor ETF, which he has managed since 2018. He also manages other funds.
Since joining Fidelity Investments in 1999, Mr. Cheng has worked as a
quantitative analyst and portfolio manager.
Benjamin
Harrison is Co-Portfolio Manager of Fidelity ®
High
Yield Factor ETF, which he has managed since 2022. He also manages other funds.
Since joining Fidelity Investments in 2009, Mr. Harrison has worked as a
managing director of research and business development and portfolio
manager.
Alexandre
Karam is Co-Portfolio Manager of Fidelity ®
High
Yield Factor ETF, which he has managed since 2018. He also manages other funds.
Since joining Fidelity Investments in 2016, Mr. Karam has worked as a research
analyst and portfolio manager.
Michael
Weaver is Co-Portfolio Manager of Fidelity ®
High
Yield Factor ETF, which he has managed since 2018. He also manages other funds.
Since joining Fidelity Investments in 2005, Mr. Weaver has worked as a research
analyst and portfolio manager.
Brian
Chang is Co-Portfolio Manager of Fidelity ®
Preferred
Securities & Income ETF, which he has managed since 2021. He also manages
other funds. Since joining Fidelity Investments in 2007, Mr. Chang has worked as
a research analyst and portfolio manager.
Adam
Kramer is Co-Portfolio Manager of Fidelity ®
Preferred
Securities & Income ETF, which he has managed since 2021. He also manages
other funds. Since joining Fidelity Investments in 1999, Mr. Kramer has worked
as a research analyst, portfolio assistant, and portfolio manager.
The
SAI provides additional information about the compensation of, any other
accounts managed by, and any fund shares held by the portfolio
manager(s).
From
time to time a manager, analyst, or other Fidelity employee may express views
regarding a particular company, security, industry, or market sector. The views
expressed by any such person are the views of only that individual as of the
time expressed and do not necessarily represent the views of Fidelity or any
other person in the Fidelity organization. Any such views are subject to change
at any time based upon market or other conditions and Fidelity disclaims any
responsibility to update such views. These views may not be relied on as
investment advice and, because investment decisions for a fund are based on
numerous factors, may not be relied on as an indication of trading intent on
behalf of any fund.
Advisory
Fee(s)
Each
fund pays a management fee to the Adviser.
The
management fee is calculated and paid to the Adviser every month.
The
Adviser pays all of the other expenses of Fidelity® High Yield Factor ETF and
Fidelity® Preferred Securities & Income ETF with limited exceptions.
The
annual management fee rate, as a percentage of each fund's average net assets,
is shown in the following table:
|
Fund
|
Management
Fee Rate |
|
Fidelity®
High Yield Factor ETF |
0.45%
|
|
Fidelity®
Preferred Securities & Income ETF |
0.59%
|
The
Adviser pays FMR Investment Management (UK) Limited, Fidelity Management &
Research (Hong Kong) Limited, and Fidelity Management & Research (Japan)
Limited for providing sub-advisory services.
The
basis for the Board of Trustees approving the management contract and
sub-advisory agreements for each fund is available in each fund's annual report
for the fiscal period ended August 31, 2022.
From
time to time, the Adviser or its affiliates may agree to reimburse or waive
certain fund expenses while retaining the ability to be repaid if expenses fall
below the specified limit prior to the end of the fiscal year.
Reimbursement
or waiver arrangements can decrease expenses and boost performance.
FDC
distributes each fund's shares.
Intermediaries
may receive from the Adviser, FDC, and/or their affiliates compensation for
providing recordkeeping and administrative services, as well as other retirement
plan expenses, and compensation for services intended to result in the sale of
fund shares.
These
payments are described in more detail in this section and in the SAI.
Distribution
and Service Plan(s)
While
each fund will not make direct payments for distribution or shareholder support
services, each fund has adopted a Distribution and Service Plan pursuant to
Rule 12b-1 under the 1940 Act with respect to its shares. Each Plan
recognizes that the Adviser may use its management fee revenues, as well as its
past profits or its resources from any other source, to pay FDC for
expenses incurred in connection with providing services intended to result in
the sale of shares of each fund and/or shareholder support services. The
Adviser, directly or through FDC, may pay significant amounts to intermediaries
that provide those services. Currently, the Board of Trustees of each fund
has authorized such payments for shares of each fund.
If
payments made by the Adviser to FDC or to intermediaries under a Distribution
and Service Plan were considered to be paid out of a fund's assets on an ongoing
basis, they might increase the cost of your investment and might cost you more
than paying other types of sales charges.
No
dealer, sales representative, or any other person has been authorized to give
any information or to make any representations, other than those contained in
this prospectus and in the related SAI, in connection with the offer contained
in this prospectus. If given or made, such other information or representations
must not be relied upon as having been authorized by the funds or FDC. This
prospectus and the related SAI do not constitute an offer by the funds or by FDC
to sell shares of the funds to, or to buy shares of the funds from, any person
to whom it is unlawful to make such offer.
State
Street Bank and Trust Company serves as each fund's transfer agent and
custodian, and is located at One Heritage Drive, Floor 1, North Quincy,
Massachusetts, 02171 and 1 Lincoln Street, Boston, Massachusetts, 02111,
respectively.
Appendix
Financial
Highlights are intended to help you understand the financial history of fund
shares for the past 5 years (or, if shorter, the period of operations). Certain
information reflects financial results for a single share. The total returns in
the table represent the rate that an investor would have earned (or lost) on an
investment in shares (assuming reinvestment of all dividends and distributions).
The annual information has been audited by PricewaterhouseCoopers LLP,
independent registered public accounting firm, whose report(s), along with
fund financial statements, is included in the annual report. Annual reports are
available for free upon request.
|
Fidelity
High Yield Factor ETF |
|
|
Year
ended
August
31, 2022 |
Year
ended
August
31, 2021 |
Year
ended
August
31, 2020 |
Year
ended
August
31, 2019 |
Year
ended
August
31, 2018 A
|
|
Selected
Per-Share Data |
|
|
|
|
|
|
Net
asset value, beginning of period |
$
56.07
|
$
54.49
|
$
52.32
|
$
50.21
|
$
50.00
|
|
Income
from Investment Operations |
|
|
|
|
|
|
Net
investment income (loss) B,C
|
2.383
|
2.250
|
2.518
|
2.589
|
0.578
|
|
Net
realized and unrealized gain (loss) |
(8.748)
|
2.335
|
2.323
|
2.006
|
0.209
|
|
Total
from investment operations |
(6.365)
|
4.585
|
4.841
|
4.595
|
0.787
|
|
Distributions
from net investment income |
(2.355)
|
(2.195)
|
(2.429)
|
(2.485)
|
(0.577)
|
|
Distributions
from net realized gain |
(1.128)
|
(0.808)
|
(0.242)
|
-
|
-
|
|
Total
distributions |
(3.483)
|
(3.003)
|
(2.671)
|
(2.485)
|
(0.577)
|
|
Net
asset value, end of period |
$
46.22
|
$
56.07
|
$
54.49
|
$
52.32
|
$
50.21
|
|
Total
Return D,E,F
|
(11.85)%
|
8.66%
|
9.61%
|
9.48%
|
1.59%
|
|
Ratios
to Average Net Assets B,G,H
|
|
|
|
|
|
|
Expenses
before reductions |
.45%
|
.45%
|
.45%
|
.44%
I
|
.45%
J
|
|
Expenses
net of fee waivers, if any |
.45%
|
.45%
|
.45%
|
.44%
I
|
.45%
J
|
|
Expenses
net of all reductions |
.45%
|
.45%
|
.45%
|
.44%
I
|
.45%
J
|
|
Net
investment income (loss) |
4.64%
|
4.07%
|
4.84%
|
5.03%
|
5.21%
J
|
|
Supplemental
Data |
|
|
|
|
|
|
Net
assets, end of period (000 omitted) |
$274,996
|
$277,532
|
$114,421
|
$68,016
|
$12,553
|
|
Portfolio
turnover rate K
|
72%
L
|
177%
L
|
179%
L
|
76%
|
8%
M
|
A
For
the period June 12, 2018 (commencement of operations) through August 31,
2018.
B
Net
investment income (loss) is affected by the timing of the declaration of
dividends by any underlying mutual funds or exchange-traded funds (ETFs). Net
investment income (loss) of any such underlying funds is not included in the
Fund's net investment income (loss) ratio.
C
Calculated
based on average shares outstanding during the period.
D
Based
on net asset value.
E
Total
returns for periods of less than one year are not annualized.
F
Total
returns would have been lower if certain expenses had not been reduced during
the applicable periods shown.
G
Expense
ratios reflect operating expenses of the class. Expenses before reductions do
not reflect amounts reimbursed, waived, or reduced through arrangements with the
investment advisor, brokerage services, or other offset arrangements, if
applicable, and do not represent the amount paid by the class during periods
when reimbursements, waivers or reductions occur.
H
Fees
and expenses of any underlying mutual funds or exchange-traded funds (ETFs) are
not included in the Fund's expense ratio. The Fund indirectly bears its
proportionate share of these expenses. For additional expense information
related to investments in Fidelity Central Funds, please refer to the
"Investments in Fidelity Central Funds" note found in the Notes to Financial
Statements section of the most recent Annual or Semi-Annual report.
I
The
size and fluctuation of net assets and expense amounts may cause ratios to
differ from contractual rates.
J
Annualized.
K
Amount
does not include the portfolio activity of any underlying mutual funds or
exchange-traded funds (ETFs).
L
Portfolio
turnover rate excludes securities received or delivered in-kind.
M
Amount
not annualized.
|
Fidelity
Preferred Securities & Income ETF |
|
|
Year
ended
August
31, 2022 |
Year
ended
August
31, 2021 A
|
|
Selected
Per-Share Data |
|
|
|
Net
asset value, beginning of period |
$
25.20
|
$
25.00
|
|
Income
from Investment Operations |
|
|
|
Net
investment income (loss) B,C
|
0.886
|
0.170
|
|
Net
realized and unrealized gain (loss) |
(4.485)
|
0.187
|
|
Total
from investment operations |
(3.599)
|
0.357
|
|
Distributions
from net investment income |
(0.931)
|
(0.157)
|
|
Total
distributions |
(0.931)
|
(0.157)
|
|
Net
asset value, end of period |
$
20.67
|
$
25.20
|
|
Total
Return D,E
|
(14.50)%
|
1.44%
|
|
Ratios
to Average Net Assets B,F,G
|
|
|
|
Expenses
before reductions |
.59%
|
.59%
H
|
|
Expenses
net of fee waivers, if any |
.59%
|
.59%
H
|
|
Expenses
net of all reductions |
.59%
|
.59%
H
|
|
Net
investment income (loss) |
3.98%
|
3.16%
H
|
|
Supplemental
Data |
|
|
|
Net
assets, end of period (000 omitted) |
$33,069
|
$
6,300
|
|
Portfolio
turnover rate |
21%
|
0%
I
|
A
For
the period June 15, 2021 (commencement of operations) through August 31,
2021.
B
Net
investment income (loss) is affected by the timing of the declaration of
dividends by any underlying mutual funds or exchange-traded funds (ETFs). Net
investment income (loss) of any such underlying funds is not included in the
Fund's net investment income (loss) ratio.
C
Calculated
based on average shares outstanding during the period.
D
Based
on net asset value.
E
Total
returns for periods of less than one year are not annualized.
F
Expense
ratios reflect operating expenses of the class. Expenses before reductions do
not reflect amounts reimbursed, waived, or reduced through arrangements with the
investment advisor, brokerage services, or other offset arrangements, if
applicable, and do not represent the amount paid by the class during periods
when reimbursements, waivers or reductions occur.
G
Fees
and expenses of any underlying mutual funds or exchange-traded funds (ETFs) are
not included in the Fund's expense ratio. The Fund indirectly bears its
proportionate share of these expenses. For additional expense information
related to investments in Fidelity Central Funds, please refer to the
"Investments in Fidelity Central Funds" note found in the Notes to Financial
Statements section of the most recent Annual or Semi-Annual report.
H
Annualized.
I
Amount
does not include the portfolio activity of any underlying mutual funds or
exchange-traded funds (ETFs).
Additional
Index Information
Fidelity®
Preferred Securities & Income ETF will compare its performance to the
performance of ICE® BofA® US All Capital Securities Index.
ICE
®
BofA
®
BB-B
US High Yield Constrained Index is
a modified market capitalization-weighted index of US dollar denominated below
investment grade corporate debt publicly issued in the US domestic market.
Qualifying securities must have an average rating (based on Moody's, S&P and
Fitch) between BB1 and B3, inclusive. The country of risk of qualifying issuers
must be an FX-G10 member, a Western European nation, or a territory of the US or
a Western European nation. The FX-G10 includes all Euro members, the US, Japan,
the UK, Canada, Australia, New Zealand, Switzerland, Norway and Sweden. In
addition, qualifying securities must have at least one year remaining to final
maturity, a fixed coupon schedule and at least $100 million in outstanding face
value. Defaulted securities are excluded. The index contains all securities of
the ICE ®
BofA
®
BB-B
US High Yield Index but caps issuer exposure at 2%.
ICE
®
BofA
®
US
All Capital Securities Index tracks
the performance of fixed rate, US dollar denominated hybrid corporate and
preferred securities publicly issued in the US domestic market. Qualifying
securities must be rated by Moody's, S&P or Fitch. Floating rate coupon or
dividend securities are excluded, but zero, step and rating-dependent coupons
are included. Index constituents are market capitalization weighted. The index
is rebalanced on the last calendar day of the month, based on information
available up to and including the third business day before the last business
day of the month.
You
can obtain additional information about the funds. A description of each fund's
policies and procedures for disclosing its holdings is available in its
Statement of Additional Information (SAI) and on Fidelity's web sites. The SAI
also includes more detailed information about each fund and its investments. The
SAI
is
incorporated herein by reference (legally forms a part of the prospectus). Each
fund's annual and semi-annual reports also include additional information. Each
fund's annual report includes a discussion of the fund's holdings and recent
market conditions and the fund's investment strategies that affected
performance.
For
a free copy of any of these documents or to request other information or ask
questions about a fund, call Fidelity at 1-800-FIDELITY. In addition, you may
visit Fidelity's web site at www.fidelity.com for a free copy of a prospectus,
SAI, or annual or semi-annual report or to request other information.
The
SAI, the funds' annual and semi-annual reports and other related materials
are available from the Electronic Data Gathering, Analysis, and Retrieval
(EDGAR) Database on the SEC's web site (http://www.sec.gov). You can
obtain copies of this information, after paying a duplicating fee, by
sending a request by e-mail to [email protected] or by writing the Public
Reference Section of the SEC, Washington, D.C. 20549-1520. You can also
review and copy information about the funds, including the funds' SAI, at
the SEC's Public Reference Room in Washington, D.C. Call 1-202-551-8090
for information on the operation of the SEC's Public Reference
Room. |
|
Investment
Company Act of 1940, File Number(s), 811-07319
|
Fidelity
Distributors Company LLC (FDC) is a member of the Securities Investor Protection
Corporation (SIPC). You may obtain information about SIPC, including the SIPC
brochure, by visiting www.sipc.org or calling SIPC at 202-371-8300.
Fidelity,
the Fidelity Investments Logo and all other Fidelity trademarks or service marks
used herein are trademarks or service marks of FMR LLC. Any third-party marks
that are used herein are trademarks or service marks of their respective owners.
© 2022 FMR LLC. All rights reserved.
|
1.9887632.106
|
HIE-PRO-1222
|
